Economyoverview:
The economy consists primarily of subsistence agriculture and fishing. The
government is the major employer of the work force, relying heavily on
financial assistance from the US. The population enjoys a per capita income
of more than twice that of the Philippines and much of Micronesia. Long-run
prospects for the tourist sector have been greatly bolstered by the
expansion of air travel in the Pacific and the rising prosperity of leading
East Asian countries.

Economic aidrecipient:
$155.8 million (1995); notethe Compact of Free Association with the US,
entered into after the end of the UN trusteeship on 1 October 1994, will
provide Palau with up to $700 million in US aid over 15 years in return for
furnishing military facilities